News - American Energy Alliance

Why Oil Prices Are Low in One Chart

February 25, 2016 by Daniel Simmons 2 Comments

With all the discussion in the media about OPEC, about the Saudis and the Russians, and about the relationship between oil prices and the stock market, there seems to be no discussion about the elephant in the room. The real reason we have low oil prices today is because since 2008, U.S. oil producers – along with some help from Canada – dramatically increased oil production. The U.S. government did nothing to help; in fact, oil production from U.S. federal lands and waters actually decreased since 2010. Private enterprise and free markets, here and in Canada, drove oil production up and oil and gas prices down.

In fact, 97 percent of the total increase in world oil production came from the U.S. and Canada alone.

From 2008 through 2014 (the most recent year for which data is available), world oil production increased by 6.686 million barrels per day. 6.491 million barrels per day of that increase came from the U.S. and Canada. In fact, 5.457 million barrels a day, or 82 percent, came from the U.S. alone.

Obviously, supply is just one half of the supply and demand equation that determines the price of oil. Oil consumption has not kept up with the increases in supply, and as a result, prices have dropped. The Energy Information Administration reports that global oil inventories increased by 1.8 million barrels per day in 2015 after also increasing in 2014. Greater supply than demand equals cheaper oil.

The problem today for U.S. and Canadian oil producers is that they’ve done too good of a job of producing oil. In fact, thanks to technological advancements in hydraulic fracturing, subsurface imaging, and horizontal drilling, 95 percent of oil producers can now extract oil at $15 a barrel.

Oil prices in the low $30 range are great for American motorists, who benefit from low gasoline prices. Unfortunately, low prices can be tough for oil producers, especially smaller independent companies, who may be forced to lay off workers and delay planned investments for future oil developments.

The good news out of all of this market turmoil is that Americans have proven that we can drill our way to cheaper prices for consumers – something President Obama said we couldn’t do – and that we have a lot more energy wealth than our own government would admit. The only thing that can go wrong is if the government makes it harder to produce energy, or tries to increase taxes on the energy producers and consumers that drive our economy forward.

Filed Under: Energy Development Tagged With: Canada, Obama, oil, oil prices, OPEC

Coalition to Congress: Reject a Carbon Tax

February 24, 2016 by AEA 2 Comments

WASHINGTON — Today the American Energy Alliance and over 20 free-market and conservative groups sent a letter to Majority Whip Steve Scalise in support of his resolution opposing a carbon tax. As the budget and appropriations process gets underway, Congress should reject efforts that would impose a carbon tax on American families, including President Obama’s recent proposal to levy a $10.25 per barrel carbon tax on oil. Below is an excerpt from the letter:

We write to collectively voice our support for House Concurrent Resolution 89, expressing the sense of Congress that a carbon tax would be detrimental to the United States economy.

As organizations that support free markets as a fundamental pathway to American prosperity, we oppose government policies – such as a carbon tax–that punish some and reward others in accordance with the government’s prevailing viewpoint on market ideals. Such marketplace manipulation represents a recipe for unintended consequences and self-inflicted economic damage. Too often, poor and middle class families bear the burden.

Indeed, independent studies demonstrate that a carbon tax would impose considerable harm on Americans. Such a tax will lead directly to higher electricity and transportation fuel costs for American families and businesses. This, in turn, will inexorably lead to increased costs for consumer goods across the board. Furthermore, a carbon tax would be regressive, imposing disproportionately high costs on middle- and lower-income families and thereby harming most those who can afford it least.

The Congressional Budget Office (CBO), in its 2013 assessment titled “Effects of a Carbon Tax on the Economy and the Environment,” plainly states: “A carbon tax would increase the prices of fossil fuels in direct proportion to their carbon content. Higher fuel prices, in turn, would raise production costs and ultimately drive up prices for goods and services throughout the economy.”

Click here to read the full coalition letter.

Click here to read AEA’s 10 Reasons to Oppose a Carbon Tax.

Filed Under: Carbon Tax, Press Releases Tagged With: carbon tax, Obama, oil tax

Sorry, Mr. President: Turns Out We Can Drill Our Way to Lower Gas Prices

February 23, 2016 by AEA 4 Comments

Four years ago today, President Obama proclaimed, “we can’t just drill our way to lower gas prices.” Once again, President Obama is on the wrong side of history. In 2012, gasoline was $3.72 per gallon. Today, it is $1.73 a gallon.

What’s changed is a massive increase in world oil production—almost all of which came from the United States. The chart below shows the increase in total world oil production in red and the increase in oil production from the U.S. Nearly 82 percent of the total increase came from the U.S. alone.

Source: EIA, International Energy Statistics, Total Oil Supply,
https://www.eia.gov/cfapps/ipdbproject/IEDIndex3.cfm?tid=5&pid=53&aid=1

Since the president made his claim, U.S. monthly oil production has increased by 52 percent. The price of a barrel of oil has fallen by over 70 percent since June 2014. And thanks in large part to technological advancements in hydraulic fracturing, subsurface imaging, and horizontal drilling, 95 percent of oil producers can extract crude oil for under $15 a barrel; a 30 percent increase since June of 2014.

The benefits of these innovations have rippled throughout the economy. Gas prices have dropped by more than 50 percent since February 2012, putting more money in Americans’ pockets. That means many low-income households, who spend a larger portion of their incomes on energy than wealthier households, may no longer have to choose between essentials like food, heating, and electric bills.

And as a recent study from the Institute for Energy Research shows, Americans would have even more money to save and spend if the Obama administration stopped holding our resources under lock and key. According to the study, opening federal lands to energy production would increase annual GDP by $127 billion, create 552,000 jobs a year, and raise annual wages by $32 billion over the next seven years. It’s the best economic stimulus the American people could ask for.

But instead, President Obama recently proposed a $10 tax on oil, which will raise gas prices by 24 cents a gallon. The oil tax sums up the president’s energy policy, which has consistently ignored the benefits of promoting affordable, reliable energy production—and endeavored to shut it down.

Much has changed in the last four years, as American energy producers have consistently innovated and reduced costs for families and motorists. In spite of President Obama’s previous claims and restrictive policies, increased energy production has provided hard-working Americans with lower gas prices. Imagine what we could do if the next administration simply let Americans get back to work?

Filed Under: Energy Development Tagged With: gas prices, hydraulic fracturing, Obama, oil, oil production, oil tax

Gov. Pence Stands Up for Indiana Families

February 22, 2016 by AEA Leave a Comment

Governor Confirms that Indiana Will Not Begin Work on EPA Carbon Rule

WASHINGTON — In a recent interview, Indiana Governor Mike Pence confirmed that Indiana would remain steadfast in their opposition to EPA’s carbon regulation following the Supreme Court’s stay of the rule.

American Energy Alliance President Thomas Pyle issued the following statement:

“Governor Pence’s decision is a great sign for Indiana families and businesses. The governor recognizes there is no reason for his state to waste precious time and resources on an increasingly legally dubious regulation, especially one that would increase electricity rates for his citizens. Even EPA Administrator Gina McCarthy acknowledged that nothing is going be implemented while the stay is in place.

“We encourage other governors and state leaders to follow the lead of Governor Pence, as well as Governor Walker of Wisconsin, and protect their citizens by ceasing all efforts to comply with EPA’s regulation.”

AEA recently issued “Stop Work” orders to leaders in every state urging them to cease all efforts to comply with EPA’s unlawful regulation. Find out more about this initiative at www.StopWorkNow.org.

Click here to visit SmartPowerPlan.org and stay up to date on how states are dealing with EPA’s rule.

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Filed Under: Uncategorized Tagged With: electricity, EPA, Governor Pence, Indiana, Obama

Why the Colorado Coal miners need you

February 17, 2016 by Mike Morrison 35 Comments

In March of last year, I had the privilege of traveling to northwest Colorado to film AEA’s “Eye of the Storm” video which chronicled the threats radical environment activists were making against the communities of Craig and Meeker. Thankfully, with your help, we were able to convince the federal government that the Colowyo mine should stay open. Unfortunately, the mine and these communities are under threat yet again.

While in Craig and Meeker, Colorado, I was blown away by the people that I met. Every person knew just how important energy is to their community. From the mayor to the hotel concierge, every single person I spoke with had a personal story about how the energy their community produces and responsibly utilizes makes their lives better. And as many miners pointed out to me, their work provides affordable, reliable energy to the entire region.

Father and son, who work together at Colowyo

Visiting the Colowyo mine was a surreal experience. At first, you drive up a winding dirt road through checkpoints, until you finally reach the mining area. Colowyo is a surface mine situated between the towns of Craig and Meeker. Cresting the ridge and looking down on the pit, you see these bright yellow trucks scurrying around with dirt and coal, but from that distance you can’t tell how massive they are. Realizing the immense scale of this project and the work these men and women do every day is profound—and in a way, beautiful.

One real surprise to me is that soon after stepping out of the truck at the mine, I noticed wildlife. You do not expect to visit a mine and see elk, antelope, deer, and even an owl, but I saw all four within the first hour of our time there. The staff pointed with pride to the areas that had been previously been mined, but were now restored and how well the land and wildlife were thriving.

After an area is mined, the company is obligated to return the land to “reclaim” the land which means to restore it to its prior state. This can take decades of care. The workers proudly pointed out previously reclaimed land, showing us areas where deer routinely bed down to sleep and eat. Nearly every miner was also an avid outdoorsman, enthralled with hunting and fishing, which the area offers in abundance. Clearly, responsible resource management was important to this talented crew.

Unfortunately, the mine and the wonderful communities it supports are now at risk. The federal government owns this land and President Obama has imposed a moratorium on new coal leasing. At the same time, EPA is trying to impose their “power plan” to reduce the use of coal to generate electricity, which would inevitably drive up electricity rates across the country. The president’s attacks on energy production, if they succeed, will devastate rural communities and threaten the continued operation of the Colowyo mine.

Right now the Office of Surface Mining Reclamation and Enforcement (OSMRE) is taking citizen comments on the Colowyo coal mine’s continued operations. They are considering whether the miners should be allowed to finish their planned work, or if the project should be ended early. Any shutdown would result in the immediate loss of more than 220 jobs and more than $200 million in economic activity in the community. Thankfully, the OSMRE wants to hear what you think about this project.

Downtown Craig, CO

You can help support this wonderful community and the energy they provide by sending an official comment to Obama’s Office of Surface Mining Reclamation and Enforcement (OSMRE). It’s important that the OSMRE hears that citizens support energy production and the responsible use of federal resources. We’ve made it easy to send a comment in: simply use this tool and send your official comment today. Together, we can send a message to the Obama Administration and help communities like Craig and Meeker across the country.

Filed Under: Blog, Climate Tagged With: CO, coal, Collum, colorado, Colowyo Mine, Craig, Trapper Mine

STOP WORK: States Should Cease All Efforts to Comply w/ Carbon Rule

February 12, 2016 by AEA 1 Comment

WASHINGTON — In response to the Supreme Court’s stay of the EPA’s carbon rule, or “Clean Power Plan,” AEA is mailing “Stop Work” orders to all Governors and other state officials urging them to immediately cease all efforts to comply with the rule.

Any action to comply with the rule before full legal resolution would be imprudent and a disservice to ratepayers. Speaking to a Congressional committee, EPA Administrator Gina McCarthy said, “Nothing is going to be implemented while the stay is in place. It is clearly on hold until it resolves itself through the courts.”

Thus, we’re delivering these orders to Governors, State Environment Departments, Public Utility Commissions, and State lawmakers.

States cannot be punished for waiting, since under the stay the compliance timeline no longer applies. With the stay in place and the future of the rule in jeopardy, there is no reason for states to move forward until litigation concludes.

AEA President Thomas Pyle issued the following statement:

“The Supreme Court rightly put the brakes on President Obama’s harmful climate agenda when it stayed EPA’s carbon regulation. But the fight doesn’t stop there. We are urging state leaders, including governors, public utility commissioners, legislators, and environmental agencies to put down their pencils and cease all efforts towards complying with the carbon regulation until the legal challenges have fully run their course.

“This ‘Stop Work’ approach is the best way for state leaders to protect their citizens from the higher energy costs and job losses that this unlawful regulation would undoubtedly cause. As a country, we should focus on ways to make electricity more affordable, not on implementing regulations that will raise energy costs, which hit the poor and middle class the hardest.”

You can visit www.StopWorkNow.org to find out more.

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Filed Under: Press Releases Tagged With: carbon rule, energy costs, EPA, stop work, Supreme Court

On EPA Rule, SCOTUS Stands Up For The Little Guy

February 9, 2016 by AEA 1 Comment

WASHINGTON – American Energy Alliance President Thomas Pyle issued the following statement on the Supreme Court’s decision to issue a stay on the Obama administration’s carbon rule:

“This is a significant victory for the American people and a strong rebuke of the Obama administration’s heavy-handed regulatory agenda. The Supreme Court should be applauded for standing up for American families after the D.C. Circuit failed to do so.

“The Supreme Court’s decision sends a clear signal to state leaders that they must avoid making any binding commitments until the legal process plays out, especially because EPA’s regulations are looking increasingly legally dubious. States should continue to pursue actions, such as legislation, to stop utilities from continuing their trend of shutting down low-cost, reliable power plants. A ‘do no harm’ approach, meaning avoiding binding commitments, is the best way to protect the American people from higher electricity costs. Now more than ever, states should follow this ‘do no harm’ approach.

“It is far too rare for the courts or Congress to back the little guy against red tape from Washington bureaucrats. Fortunately, that’s exactly what happened today.”

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Filed Under: Press Releases Tagged With: carbon rule, electricity, EPA, Obama, power plants, Supreme Court

Key Vote: Senate Energy Bill Amendments

February 1, 2016 by AEA Leave a Comment

The Senate is poised to consider broad energy legislation, the first of its kind since 2007. S.2012, the Energy Policy Modernization Act, seeks to address various facets of energy policy, from efficiency standards to power supply and the electric grid. Overall, this bill fails to shepard in significant energy policy reform and instead increases regulation and spending in an effort to fix perceived problems—similar to the 2005 and 2007 energy bills. In reality, few energy issues are improved through additional federal regulation and subsidies. Instead, legislation should be focused on limiting the scope of the federal government and promoting American energy prosperity.

Several amendments to this bill are worth highlighting. The American Energy Alliance will key vote these amendments, should they receive a vote on the Senate floor.

YES on Cassidy Amendment Repealing the Renewable Fuel Standard (RFS): Sen. Cassidy introduced an amendment that would fully repeal the Renewable Fuel Standard. The RFS was created in the 2005 energy bill and amended by the 2007 energy bill. This costly mandate has hurt American families and businesses for over a decade by driving up fuel prices and requiring expensive, uneconomical, and commercially unavailable “advanced” biofuels to be blended into gasoline by refiners. Sen. Cassidy’s amendment would fully repeal the RFS, thus ending the ethanol and advanced biofuels blending mandates. The American Energy Alliance supports full repeal of the RFS and urges all Senators to vote YES on SA 2977, the Cassidy RFS repeal amendment.

YES on Lee Amendment Blocking Permanent Reauthorization of the Land and Water Conservation Fund (LWCF): Sen. Lee introduced an amendment striking language that would permanently reauthorize the Land and Water Conservation Fund (LWCF). The LWCF is funded through offshore drilling fees and royalties, which then go into an account that is used to finance federal land acquisition and management. However, the federal government is a historically poor steward of our nation’s land. From environmental mismanagement to the stifling of natural resources development, the federal government has proven inept as a caretaker of America’s lands. States, not the federal government, should be in charge of maintaining public lands, as states have more local knowledge and are more invested in maintaining the lands in which they live. While the LWCF was extended for three years in the recent Omnibus bill, Sen. Lee’s amendment striking permanent reauthorization of the LWCF is a step toward holding the federal government in check. The American Energy Alliance urges all Senators to vote YES on SA 3022, Sen. Lee’s LWCF amendment.

NO on Reid-King Amendment on Net Metering: Sens. King and Reid introduced an amendment that would increase energy prices for consumers and trample on the abilities of states and localities to best serve their electricity users. Their amendment, which aims to federalize net metering policy, would limit the ability of state electricity regulators to change net metering policies. State regulators already oversee net metering of distributed energy generation, including rooftop solar, and the regulation of electricity rates has always been the prerogative of state and localities, not the federal government. Further, the amendment would force utilities to increase fees for all customers, not just those who opt to participate in net metering services. This would make net metering even more regressive by levying additional fees on non-net metering customers, who tend to have lower incomes than net metering customers. The King-Reid amendment unnecessarily increases the scope of the federal government and would harm American families, especially the poor and middle class who cannot afford expensive solar systems. The American Energy Alliance urges all Senators to vote NO on SA 3120, the King-Reid net metering amendment.

Filed Under: Energy Development, Renewable Fuel Standard Tagged With: biofuels, energy, Energy prices, ethanol, fuel prices, LWCF, net metering, offshore drilling, Renewable Fuel Standard, rfs

Go Big or Go Home: Only Solution for RFS is Full Repeal

January 28, 2016 by AEA Leave a Comment

WASHINGTON – Today, the American Energy Alliance launched a six-figure advocacy initiative urging Congress to reject efforts that fall short of fully repealing the Renewable Fuel Standard. Amid speculation that the Toomey-Feinstein partial repeal language could be added as an amendment to the Senate Energy Bill, AEA will run a digital advocacy initiative in Washington, D.C. and Pennsylvania. These ads will educate D.C. policymakers about why full repeal is the only solution and call on Pennsylvanians to set Senator Toomey straight.

“The RFS is a broken policy and no amount of tinkering is going to fix it,” said AEA President Tom Pyle.

“The Toomey-Feinstein partial repeal would make the RFS even more burdensome for Americans because it will focus the mandate on costly phantom fuels like cellulosic ethanol. This plan would move America towards a California-style Low Carbon Fuel Standard, which is partly why Californians pay the highest gas prices in the country. Congress should learn from California’s disastrous energy policy, not mimic it.”

View the Pennsylvania digital banner ads here and here.

View the D.C. digital banner ad here.

View one of the Facebook ads here.

AEA has also joined a coalition of free-market and conservative organizations in a letter opposing the Toomey-Feinstein language. Below is an excerpt from the letter:

The RFS is a broken and deeply flawed program. Corn ethanol does not need the mandate to survive in the market, and doing away with only the implied-corn ethanol part of the program would make the mandate worse by focusing it on expensive “advanced” biofuels. This would raise gasoline prices on Americans, who are currently enjoying much-needed relief in the form of low fuel prices.

Lastly, we want to make it clear that we do not support subsidies or mandates for any fuel. The RFS is fatally flawed, but the Toomey-Feinstein proposal does not fix the problem.

We urge you to oppose the Toomey-Feinstein proposal, or any language aimed at repealing the corn ethanol mandate and preserving the advanced biofuel, cellulosic biofuel, and biomass-based diesel requirements.

Click here to read the full letter.

Click here to read The Hill’s article on AEA’s advocacy initiative.

To schedule an interview with AEA President Tom Pyle, contact Chris Warren at [email protected] or 202-621-2947.

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Filed Under: Renewable Fuel Standard Tagged With: biofuels, ethanol, Renewable Fuel Standard, rfs, subsidies

ICYMI: Ethanol Mandate Hurts Iowa Corn Farmers

January 27, 2016 by AEA Leave a Comment

Yesterday, American Energy Alliance President Thomas Pyle penned an op-ed on The Hill’s Congress Blog explaining how the Renewable Fuel Standard hurts Iowa farmers—despite conventional wisdom to the contrary. The full text is included below:

Ethanol mandate hurts Iowa corn farmers
By Thomas Pyle

Iowans will soon cast the first votes of the 2016 presidential election. As the caucus draws near, Washington lobbyists are working overtime to smear any candidate who stands up for Iowa families against the special interests.

On no issue is this clearer than the federal ethanol mandate, the Renewable Fuel Standard (RFS). The RFS requires refiners to blend enormous amounts of biofuel, mostly corn-based ethanol, into gasoline. This mandate raises gasoline prices, costing American motorists $83 billion in higher fuel costs since 2007.

Conventional political wisdom is that the RFS helps Iowa corn farmers by creating artificial demand for their product. But even if the RFS has helped corn farmers in the past, it will hurt them in the future.

Over the next seven years, the RFS calls for corn-based ethanol to cede market share to other biofuels. In 2007, Congress set annual statutory volumes for ethanol, divided into two main categories: total renewable fuel and “advanced” biofuels. To qualify as “advanced,” EPA has to certify that the fuel emits less greenhouse gas emissions than conventional gasoline.

Crucially, corn ethanol does not qualify as “advanced.” This didn’t matter in the early years, since the statute required tiny amounts of “advanced” biofuels, leaving corn to fill the vast majority of the total mandate. However, Congress and President George W. Bush designed the RFS to cap corn ethanol and dramatically ramp up “advanced” biofuels.

What year does the RFS cap corn ethanol? 2015. Going forward, if the RFS remains in place, Congress intends “advanced” biofuels to gradually displace corn’s market share. As the Congressional Research Service (CRS) explains: “Over time, the growth in the RFS slowly transitions from consisting primarily of biofuels made mostly from food and feed crops to biofuels made from non-food and non-feed crops.”

How much market share would corn lose? CRS concludes: “If actual renewable fuel production were to match what is in the statute for 2022, advanced biofuels would constitute close to 60 percent of the 36.0 billion gallon mandate and unspecified biofuel [corn] would constitute about 40 percent.”

Fortunately for the corn industry, “advanced” biofuels have failed to take off as Congress expected. Moreover, EPA can reduce the volumes Congress called for in the statute, which they have done for several years in a row.

Still, the fact that federal law calls for the gradual displacement of corn-based ethanol should concern corn farmers. Unlike “advanced” biofuels, which are scarce and expensive, corn ethanol is a viable product that boosts octane and improves engine performance. Refiners would still purchase corn-based ethanol without the RFS. But if the RFS remains in place, corn stands to lose out to products that do not pass the market test, simply because Washington decrees it.

The solution is simple: repeal the entire RFS. Corn-based ethanol would survive and likely retain its share of the total fuel market. Meanwhile, “advanced” biofuels would be forced to compete against corn on a level playing field. If the “advanced” fuels are really so advanced, shouldn’t they win on their own merits?

None of the presidential candidates have called for full RFS repeal. However, some Republican candidates (Jeb Bush, Sen. Ted Cruz, and Carly Fiorina) have pledged to “phase out” the mandate. Of these proposals, Cruz’s (Texas) approach does the most to protect the interests of the American people, including Iowa’s corn farmers. Our presidential energy scorecard details the full positions of each candidate.

With the caucus a week away, ethanol lobbyists have ramped up their spin machines. They’re trotting out the same old attacks to scare Iowans into supporting the RFS. But this election can be different. Regardless of which party or candidate you support, it’s time to reject the special-interest scare tactics and support policies that advance the interests of Iowa families and all Americans.

Click here to view AEA’s Presidential Energy Scorecard.

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Filed Under: Renewable Fuel Standard Tagged With: biofuel, corn ethanol, ethanol, Renewable Fuel Standard, rfs